Car sales slump for sixth month in a row

Matt Allan

Published:1:16 pmOctober 5, 2017

The number of new cars sold last month fell by almost 10 per cent – the sixth consecutive month of decline in the market.

The latest data from the Society of Motor Manufacturers and Traders (SMMT) shows that overall new car sales were down 9.3 per cent year on year, to 426,170, with diesel and petrol models both falling as hybrids and electric cars increased.

Most worrying for the industry is the fact that September is usually a bumper month as customers rush to get the new registration. This was the first September in six years that the market has shrunk.

The sale of nearly 95,000 new alternatively fuelled vehicles (AFVs) – a 41 per cent increase on last September – couldn’t compensate for the 1.2 per cent drop in petrol and 21.7 per cent drop in diesel car sales.

The SMMT and others have blamed economic and political uncertainty for the continued decline in sales as well as confusion over air quality plans and the Government’s announcement that new petrol and diesel cars will be outlawed by 2040.

Concern

Mike Hawes, SMMT chief executive, said: “September is always a barometer of the health of the UK new car market so this decline will cause considerable concern.

“Business and political uncertainty is reducing buyer confidence, with consumers and businesses more likely to delay big ticket purchases. The confusion surrounding air quality plans has not helped, but consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges.

“Manufacturers’ scrappage schemes are proving popular and such schemes are to be encouraged given fleet renewal is the best way to address environmental issues in our towns and cities.”

The sale of hybrids and EVs was up more than 40 per cent

The SMMT warned that if the current decline in diesel sales continues, the UK could see its CO2 emissions rise by the end of the year for the first time since records began. It also said that a lack of public understanding on air quality schemes was undermining the sale of diesel cars and efforts to cut pollution by promoting modern low-emissions vehicles.

Responding to the figures, Richard Jones, managing director of finance provider Black Horse, said: “With the new 67-plates now available, September was an important month for the industry and today’s figures reflect the general slowdown across the market.

“The ongoing action from manufacturers around scrappage schemes and the broader discussion around fuel technology might well have impacted on the numbers given that we saw a continued fall in sales of diesel cars, although it is positive to see these reductions counterbalanced somewhat by the growth of alternative fuel vehicles (AFVs). AFVs in particular have grown significantly this year and we expect that trajectory to continue.”

Confusion

Alex Buttle, director of car buying comparison website Motorway.co.uk, warned a number of factors were “kicking the market hard when it’s already on the floor”.
He commented: “It is far too easy to blame the drop off in demand on the summer break, but that’s just a small detail in a bigger picture.

“The Brexit effect is weighing heavily on the shoulders of the car market. Throw into the mix stretched household finances and concerns over PCP and a potential car finance bubble, and we believe people are choosing to sit on their declining assets at a time of intense economic confusion.”